If there’s one thing retailers love, it’s a well stocked store. They figure if they’ve got more, they’ll sell more.  I remember my father used to say: “You can’t sell from an empty shelf!”.  So when I got into retailing, I continued to build shelves so I could house more inventory.  I loved buying and the reps all were my best friends.  I spent long days at the merchandise mart each week and long weeks at the trade shows.  And I seemed to have reps in and out of the store on a regular basis.  I wanted it first and didn’t want to run out..

I was lucky back then as my store was unique and customers were coming in to see what was new.  My staff loved everything that came in and wanted to buy it for themselves so they were eager to share with the customers.  There was no internet and retailers had not yet decided that they would compete by lowering prices rather than providing better service, better displays and better selection.

My sales were good, but my inventory growth was outpacing my sales growth.  I had turned my store into a merchandise monster.  The customers thought it was great, but even with excellent sales, I was having trouble keeping up with the bills.  I began to realize that there were limits to my sales even though they were growing, and  there needed to be limits to my buying if I was to remain profitable.  So I took a year, stopped buying (that’s how much inventory I had) and developed an open to buy system.

Everything changed.  Sales kept on growing, but my inventory dropped by 75%! Suddenly I had no problems paying bills and a large surplus in the bank.  Open to buy was the answer for me.

So, how’s your inventory?  How’s your bank balance at the end of your bills?  Does more inventory mean more sales for you?  Please share your thoughts with us.

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